Agricultural Policy

In 1979 the new Sandinista administration quickly
identified
food as a national priority in order that the country's
chronically malnourished rural population could be fed.
The
government planned to increase production to attain selfsufficiency in grains by 1990. Self-sufficiency in other
dietary
necessities was planned for the year 2000. For a variety
of
reasons, however, including the private sector's retention
of 60
percent of arable land, the Sandinista government
continued to
import food and grow cash crops. In 1993 the goal of selfsufficiency in food production was still far from being
achieved.

To generate essential foreign exchange, the Ortega
administration continued to support an upscale, high-tech
agroexport sector, but returns on its investment
diminished. By
1990 only one-quarter of the pre-1979 hectarage planted in
cotton, one of the leading foreign exchange earners in the
1970s,
was still under cultivation. Despite an established
priority for
food production, food imports to Nicaragua grew enormously
from
the mid-1970s to the mid-1980s.

In general, the Sandinistas made little progress in
reducing
economic dependence on traditional export crops (see
table 8,
Appendix A). To the contrary, faced with the need for food
selfsufficiency versus the need for essential foreign exchange
earnings, the Ortega administration, demonstrating scant
economic
expertise, continued to prop up the country's traditional
agroindustrial export system. They did so despite expensive
foreign
imports, diminished export markets, and a powerful
opposing
private sector. However, revenues from traditional export
crops
continued their rapid decline throughout the 1980s.
Despite this
drop, agriculture accounted for 29 percent of the GDP in
1989 and
an estimated 24 percent in 1991. Agriculture still
employed about
45 percent of the work force in 1991.

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